Correlation Between Lion One and Chuangs China
Can any of the company-specific risk be diversified away by investing in both Lion One and Chuangs China at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lion One and Chuangs China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Chuangs China Investments, you can compare the effects of market volatilities on Lion One and Chuangs China and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lion One with a short position of Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Chuangs China.
Diversification Opportunities for Lion One and Chuangs China
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and Chuangs is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments and Lion One is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lion One Metals are associated (or correlated) with Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of Lion One i.e., Lion One and Chuangs China go up and down completely randomly.
Pair Corralation between Lion One and Chuangs China
If you would invest 1.00 in Chuangs China Investments on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Chuangs China Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Chuangs China Investments
Performance |
| Timeline |
| Lion One Metals |
| Chuangs China Investments |
Lion One and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Chuangs China
The main advantage of trading using opposite Lion One and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One position performs unexpectedly, Chuangs China can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chuangs China will offset losses from the drop in Chuangs China's long position.| Lion One vs. HEALTHCARE REAL A | Lion One vs. Goosehead Insurance | Lion One vs. INSURANCE AUST GRP | Lion One vs. SBI Insurance Group |
| Chuangs China vs. Hongkong Land Holdings | Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings | Chuangs China vs. Origin Agritech |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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